Homework 1
Chapter 07 … Master Budgets and Performance Planning
1. A budget is a formal statement of future plans, usually expressed in monetary terms.
2. Continuous budgeting is the practice of preparing a new budget for a selected number of future periods and revising those budgets as each period is completed.
3. Budget preparation is best determined in a top-down managerial approach.
4. The master budget consists of three major groups of budget components: the operating budgets, the capital expenditures budgets, and the financial budgets.
5. The budget process is a continuous activity of planning, revising, and evaluating business activities.
6. A cash budget is a plan that includes the expected cash receipts and cash expenditures during each of the periods that it covers.
7. Which of the following is not a benefit derived from budgeting? A. Budgeting focuses management 's attention on the future. B. Budgeting provides coordination of departments. C. Budgeting provides a basis for evaluating performance. D. Budgeting provides motivation for managers and employees. E. Budgeting assures the achievement of all goals.
8. Which of the following statements about budgeting is false? A. Budgeting is an aid to planning and control. B. Budgets create standards for performance evaluation. C. Budgets help coordinate the activities of the entire organization. D. Budgeting forces managers to think ahead and formalize long-range objectives. E. The master budget should only be prepared by top management.
9. The set of periodic budgets that are prepared and periodically revised in the practice of continuous budgeting is called: A. Production budgets. B. Sales budgets. C. Cash budgets. D. Rolling budgets. E. Capital expenditures budgets.
10. The practice of preparing budgets for each of several future periods and
1. A budget is a formal statement of future plans, usually expressed in monetary terms.
2. Continuous budgeting is the practice of preparing a new budget for a selected number of future periods and revising those budgets as each period is completed.
3. Budget preparation is best determined in a top-down managerial approach.
4. The master budget consists of three major groups of budget components: the operating budgets, the capital expenditures budgets, and the financial budgets.
5. The budget process is a continuous activity of planning, revising, and evaluating business activities.
6. A cash budget is a plan that includes the expected cash receipts and cash expenditures during each of the periods that it covers.
7. Which of the following is not a benefit derived from budgeting? A. Budgeting focuses management 's attention on the future. B. Budgeting provides coordination of departments. C. Budgeting provides a basis for evaluating performance. D. Budgeting provides motivation for managers and employees. E. Budgeting assures the achievement of all goals.
8. Which of the following statements about budgeting is false? A. Budgeting is an aid to planning and control. B. Budgets create standards for performance evaluation. C. Budgets help coordinate the activities of the entire organization. D. Budgeting forces managers to think ahead and formalize long-range objectives. E. The master budget should only be prepared by top management.
9. The set of periodic budgets that are prepared and periodically revised in the practice of continuous budgeting is called: A. Production budgets. B. Sales budgets. C. Cash budgets. D. Rolling budgets. E. Capital expenditures budgets.
10. The practice of preparing budgets for each of several future periods and